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Informist, Monday, Jul. 20, 2026

 

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--Indian Overseas Bk: Made employee benefit provisions for FY27 in Apr-Jun 
--CONTEXT: Comments from Indian Overseas Bk mgmt in post earnings media call 
--Indian Overseas Bk: Made INR 4 bln provision for expected credit loss in Apr-Jun 
--Indian Overseas Bk: Made INR 21 bln provision for expected credit loss so far 
--Indian Overseas Bk: Expect INR 30 bln hit from expected credit loss norms 
--Indian Overseas Bk: Raised $300 mln via FCNR(B) deposits so far 
--Indian Overseas Bk: Aim to raise $650 mln via FCNR(B) deposits till Sept 
--Indian Overseas Bk:Aim to raise $1 bln via FCNR(B), overseas borrow by Sept 
--Indian Overseas Bk: Have corporate loan pipeline of INR 140 bln 
--Indian Overseas Bk: Corporate loan demand moderate, not very aggreesive 
--Indian Overseas Bk: Expect G-Sec yields to remain stable from hereon 
--Indian Overseas Bk: Plan to open 50 new branches in FY27 
--Indian Overseas Bk: Expect NIM to remain in 3.3-3.4% range going forward 
--Indian Overseas Bk Apr-Jun cost of funds at 4.85% vs 4.90% qtr ago 
--Indian Overseas Bk retail advances at INR 966.4 bln on Jun 30, up 36.5% YoY 
--Indian Overseas Bk Q1 write off INR 1.74 bln vs INR 2.38 bln year ago 

 

MUMBAI – Indian Overseas Bank aims to raise $1 billion through foreign currency non-resident bank deposits and external commercial borrowing by the end of September, Managing Director and Chief Executive officer Ajay Kumar Srivastava said at a post-earnings press conference Monday. So far the bank has received $300 million through FCNR(B) deposits and expects it to rise to $650 million by the end of September, the official said.    

 

The lender has introduced a special scheme to attract FCNR dollar-denominated bank deposits and has set a rate of 6.50% for three-year to five-year tenor deposits. The bank had introduced this special scheme after the Reserve Bank of India announced a concessional dollar-rupee swap facility for fresh FCNR(B) deposits. 

 

Srivastava said the bank's net interest margin is expected to remain at a range of 3.3-3.4% going forward. For the June quarter the bank's net interest margin was up 31 basis points on year at 3.48%. 

 

Indian Overseas Bank reported a net profit of INR 16.59 billion for the June quarter, up over 49% on year and over 10% on quarter. This was led by an over 23% rise in total income at INR 109.38 billion.

 

 

Of the $1 billion foreign capital the bank aims to raise, while $650 million would be through FCNR(B) deposits, the remaining part of the target will be met through an external commercial borrowing line, the managing director said.

 

Employee expenses of the bank rose over 80% on year and 109% on quarter to INR 21.04 billion in the June quarter. This has led to a 39% rise in the bank's operating expenses to INR 31.55 billion in the June quarter. "Operating expenses also have increased by 68.81%, primarily because additional provision we have made towards HR related expenses," Srivastava said. The lender has made an additional provision of INR 11 billion for pension, gratuity, leave encashment, and other employee-related expenses for the rest of the year in the June quarter itself.    

 

The lender also made an INR-4-billion provision for an expected credit loss in the June quarter. The lender made an additional provision of around INR 21 billion for expected credit loss so far against the estimated requirement of around INR 30 billion hit from expected credit loss norms by the end of 2026-27 (Apr-Mar), Srivastava said. 

  

The bank has a corporate loan pipeline of INR 140 billion and sees moderate demand for corporate loans. "Corporate demand is there, not very aggressive demand, but moderate demand...there is no challenge as such," the managing director said. The official expects yields on government securities to remain stable hereon. 

 

Srivastava said the bank plans to open 50 new branches in FY27. The bank's cost of funds in the June quarter was at 4.85%, down from 4.90% a quarter ago. Its retail advances were at INR 966.4 billion as on Jun. 30, up 36.5% on year. For the June quarter, the write-off was INR 1.74 billion, down from INR 2.38 billion in the same quarter the previous year.

 

Monday, shares of the bank ended at INR 35 of the National Stock exchange, up 3.4% from Friday's close.  End

 

US$1 = INR 96.45

 

Reported by J. Navya Sruthi and Kabir Sharma

Edited by Akul Nishant Akhoury

 

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